Tag: Financing

By on April 12, 2019

China’s auto sales declined for the ninth consecutive month in March, further proving that the market isn’t as infallible as once thought. The assumption was that, as North America surpassed peak growth and flattened out, Chinese auto sales would continue an upward trajectory. But, while China did surpass the U.S. in becoming the world’s largest auto market, it’s not living up to its billing as a golden goose.

That’s not to suggest the U.S. is about to stand triumphantly atop that mountain. Automakers are issuing profit warnings for 2019 and Moody’s Investors Service expects light vehicle sales to fall 1.2 percent this year.

“The accommodative financing environment that had helped buoy U.S. car sales is receding. Maintaining operating and financial discipline will be crucial [for 2019],” the bond credit rating business advised. (Read More…)

By on February 4, 2019

2019 Ram 3500 Heavy Duty Limited Crew Cab Dually with RV trailer

Image, for a moment, that the trailer pictured above is filled with debt. It’s a good representation of the average new vehicle purchase.

Looking at last month’s stats, you’d have to go back to the safe and comfortable pre-Twitter era to find a January in which fewer people got their hands on a zero percent new vehicle loan. January 2006, to be exact.

Last month wasn’t just a departure from a decade past — the car buying landscape appeared quite different just a year ago, all thanks to rising interest rates and the perpetual upward creep of new car pricing. Data from Edmunds helps break down the differences.

Suffice it to say you’re likely paying a lot more, but you’re spreading it out over a longer term. (Read More…)

By on September 21, 2018

Earlier this year, Elio Motors said it would launch its own cryptocurrency as a way of funding its troubled three-wheeler. During the initial ElioCoin announcement in April, Elio also said it partnered with Overstock.com to relieve some of its debt. The website claimed it purchased $2.5 million of the startup’s newly issued shares.

As helpful as a few million dollars would be toward progressing Elio’s goals, the cryptocurrency plan seemed patently ridiculous. We didn’t expect to hear much more about it.

Color us surprised, though. Elio has now formally launched the pre-sale of the ElioCoin Security Token, noting that Patrick M. Byrne — Overstock.com’s founder and CEO — will be the first person to open up his wallet to participate in this strange new offer.  (Read More…)

By on May 4, 2018

 

Tesla Motors is 15 years old and it is still not profitable. Hyperbolic stock values have encouraged investors to keep showering Elon Musk and his crew with billions of dollars to keep the EV company afloat and develop new products, but now the Bloomberg news agency says that Tesla’s cash burn is severe enough to make the company insolvent this year if they don’t raise new capital, something made more difficult by a recent 24% decline in that stock’s value.

Reporters Dana Hull and Hannah Recht did a deep dive into Teslas finances, both where their money has come from and where it’s been going. They came up with some interesting data. The company is going through cash at the rate of about $6,500 a minute, a bit more than $9 million a day. Free cash flow has been in the red for over a year. That’s how much money a firm generates after subtracting capital expenses. (Read More…)

By on October 9, 2017

baby driving
People love generational studies. The notion that being born a few years away from another person creates a disparate, irreconcilable identity is an appealing one and is, to some extent, backed by plausible evidence. After all, growing up in 1975 was different than growing up in 2005. However, when exactly those subtle differences surface to an extent where they can be measured is debatable.

That’s why I was so intrigued by a recent study indicating that Generation Z will be “nothing like their Millennial predecessors” when it comes to financing automobiles and purchasing automotive insurance. Members of Generation Z currently run between the ages of five and 21. So, how exactly will your five-year-old go about procuring coverage or a loan for their first automobile?  (Read More…)

By on August 24, 2017

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Car buyers who borrowed money to finance their purchase are seeing higher loan debt per borrower rates, along with higher delinquency rates. And it’s happening on both sides of the border.

Let’s start with Canada. Automotive News picked up a report from TransUnion showing that average auto-loan debt per borrower has gone up in the second quarter, and so too have delinquency rates. This is happening as vehicle prices have also risen during the same time period. Consumers are also rolling in other debt and parts of the country are still in recovery mode from the recent economic crisis.

(Read More…)

By on June 12, 2017

Car dealership, Image: VadimGuzhva/Bigstock.com

Years back, after the desire to purchase one particularly fetching model became too great, you walked into the dealership, marched right over to the salesman’s cubbyhole, and signed over several years’ worth of payments on your ride du jour. Bliss ensued.

Unfortunately, come trade-in time, your once-desirable ride isn’t even worth the amount left owing. You’re in negative equity, pardner. Still, buyers faced with this situation have a number of options at their disposal.

Thanks to a recent study of new car buyers, we now know exactly how owners of low-value trade-ins chose to deal with their unexpected debt. (Read More…)

By on May 31, 2017

Bright colors and lowered prices try to attract customers to a California used car lot, Image: Bike Tourist/Bigstock.com

The low, low monthly payments offered by spreading the cost of a new or used vehicle across a vast gulf of time is certainly an attractive one, even though the practice is fraught with hidden danger.

For U.S. car buyers, it has also become a very popular one, with data showing just how many people have decided to embrace a 73- to 84-month payment plan. Not only are their spending habits changing, they’re also changing their lender. (Read More…)

By on December 29, 2015

Imagine the following scenario: You’re a Buick salesman. An elderly woman comes into your showroom to inquire about a replacement for her Regal. You decide that she’s a great candidate for an Encore, and since you have some previous-year Encore stock you decide that she’s a great candidate for a 2015 Encore instead of the new model. There’s a $149/month lease deal available from GM Financial. What kind of deal do you make for this woman?

If your answer is, “I’d charge her over sticker for the vehicle, switch the lease company to make some back-end money, and add nearly a thousand dollars of profit in fees above that,” then you might just be the salesman that Buick GMC of Beachwood, OH needs.

(Read More…)

By on December 23, 2015

Nissan GT-R LM NISMO

From DNF to DNS, the Nissan GT-R LM project has finally been retired.

That, and it’s lights out for some Crown Vics, the UAW just wants to talk, Hyundai will spend more to lend more, and more … after the break.

(Read More…)

By on August 31, 2015

1

“Honey? I just got into an accident!” she said.

My body experienced an instant adrenaline rush as my mind wandered through the worst “what if?” possibility of that moment, something like the image above.

My wife… Hospital… Pain… Medical bills… The other driver…

“Is everyone okay?” I asked in reply.

(Read More…)

By on June 10, 2015

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You have worked hard to save the $20,000 you need to purchase the car of your dreams. You’re ready to step into the dealership, walk straight to the manager in the back, plunk down those greenbacks, and say, “I have cash! Give me your best price!”

This may have worked in the days before electronic banking and factory rebates, but paying cash today will likely cost you more.

(Read More…)

By on August 19, 2014

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In this year’s red hot new car market, the Honda Accord and CR-V have apparently captured the top spot in both new car and SUV retail sales through the first half of 2014, according to Polk registration data. But John Mendel, Honda’s head of sales, had some pointed words for the industry as a whole, and the state of the American auto market.

(Read More…)

By on August 19, 2014

saab-9-3-aero-sedan-my14-09-1

Remember when Saab’s new parent company was close to being taken to court and forced to declare bankruptcy by one of its suppliers? New information may have helped changed course.

(Read More…)

By on March 24, 2014

SC06_Aston_Martin_Vanquish_green

One year ago, we reported on the alarming trend of 97 month loans for new car sales. It turns out that these have now been supplanted by a substantially longer term. Say hello to the 144 month loan.

(Read More…)

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